Is there greater thrill than encountering a new species technology in the wild ? The blogs Threat Level/Gawker recently reported the appearance of an entirely new genre of technology: an anonymous marketplace, or anonymarket.

Out there on the internet is a place where you can buy and sell anything anonymously using untraceable money. What is mostly being bought and sold in this stealth market right now are recreational drugs — pot and acid, etc. There has always been black markets in every city of the world, but as underground and out of sight as they might be, you still needed to show up in person to trade. And there has long been outlaw areas of the internet where black markets thrive and you don’t need to reveal yourself, but paying without any trace has been a problem.

This new online stealthy anonymart, called Silk Road, solves these problems with two existing technologies. Silk Road uses established anonymizing Tor network to trade anonymously, and it employs the new Bitcoin peer-to-peer encrypted payment system to provide untraceable payments, which can in theory be converted to dollars or other national currencies.

To connect to the site you need Tor, but here is a proxy which will let you inspect it from your ordinary browser. You can see there is cannabis, ecstasy, LSD, opioids, MDMA, and almost any drug you want for sale. Delivery guaranteed! And feedback ratings about the sellers from users.

Here is what Silk Road says about itself:

Silk Road is an anonymous marketplace where you can buy and sell without revealing who you are. We protect your identity through every step of the process, from connecting to this site, to purchasing your items, to finally receiving them.

Connecting to the site

Silk Road uses the Tor network to anonymize all traffic to and from the site so no one can find out who we are or who you are from your internet traffic. All traffic is encrypted and relayed through Tor nodes across the globe, each one not knowing the origin or destination of the traffic. To learn more about the Tor network, visit torproject.org.

Purchasing your items

The currency used to buy stuff on Silk Road is called Bitcoin. Bitcoin uses encryption and a system of peer-to-peer double checking to create a completely digital currency. No personal information is associated with your bitcoins at all, making them ideal for anonymous transactions. Additionally, Silk Road employs a built-in tumbler that mixes all incoming bitcoins through a series of dummy transactions before they ever leave. Click here for instructions on how to get Bitcoins, or visit Bitcoin.org to learn more.

Delivery

Absolutely none of your personal information is ever required here. However, an address WILL be needed to accept delivery of any physical goods. Even so, it is stored encrypted, and is deleted as soon as your transaction is complete, so there is no record of it. And, because Silk Road is a Tor Hidden Service, the address remains encrypted within the Tor network when it is transferred.

For more details about improving your anonymity and making purchases, please read our buyers guide.

Silk Road is all of four weeks old, so its stealthiness is unproven. In theory it looks viable. But Tor and Bitcoin are open source, so the savvy can see what they are standing upon. But there are inherent challenges with any private currency, and there are inherent challenges with any encryption scheme. At the point where either of these systems touch the legitimate world (and they must to be useful), there is potential for breakdown, scams, break-in, or disruptions.

Bitcoin in particular has serious complexities. It is a private currency, and all private currencies are liable to scams. But an anonymous peer-to-peer one is even more liable, because there is no central enforcement — by definition. The technicalities of Bitcoin are impressive, complex, and almost beyond the understanding for most lay users. For a sobering critique of Bitcoin, I recommend reading at least one skeptic‘s take on it before you decide to use it. His argument is that the way Bitcoin is engineered makes it biased towards the earliest users (the value of their “dollars” will increase more than later users) and is therefore a type of pyramid scam. That is a long-term consideration; this deflation probably will not deter a kid who wants to score some speed this week.

And the critique says nothing of the potential weaknesses of Bitcoin’s encryption aspect. Usually these cypher schemes are not broken directly, but indirectly via patterns of use. As the cypherpunks say, encryption is economics. Anything can be hacked if you apply enough money. As long as the amount of money in these stealth markets remains modest, they will be secure. But once they rise to some threshold, they will trigger investments into cracking them. Perhaps bit traffic is analyzed network wide, or honey pot sellers rated high by shills set up to pounce on the unsuspecting — whatever.

Stealthy anonymarts will respond to these attempts of control with new overcoming innovations. Supporters will devise more robust psuedo-anonymous reputation technology to ferret out honeypots. The anonymarts will not go away. But neither will they become widespread. They will retain a risk of some calculation. Like virus makers, and scam artists, and ebay snipes, and poker bots, these organizations are here to stay and are now part of the ecology.

In the forums of Bitcoin someone claiming to be Silk Road staff posted a very enthusiastic message:

Hi everyone,

Silk Road is into it’s third week after launch and I am very pleased with the results. There are several sellers and buyers finding mutually agreeable prices, and as of today, 28 transactions have been made!… What is missing? What works? What do you want to see created? What obstacles do you see for the future of Silk Road? What opportunities? … The general mood of this community is that we are up to something big, something that can really shake things up. -Silk Road staff

Silk Road’s future is uncertain. It will go along gang-busters until someone, somewhere will be busted. (You have to pick up mail somewhere.) But the invention is out of the bottle. There will be more anonymarts, probably named the Black Hole, the Trading Den, Pirates Cove, the Back Room, and the like. For every Silk Road stealth market that sinks, five more will erupt. Silk Road claims it will not allow “harmful” products to be listed, but other anonymarkets will not be so constrained. They will sell not only drugs, but stolen credit cards, passports, weapons and sex.

Anonymarkets are yet another species of net life in a networked world. Hard to eradicate, they will thrive in the cracks of the global economy. You can buy anything you want at Alice’s Stealthy Anonymart. Including Alice. Step right up.

But anonymarts won’t overthrow capitalism, cause the downfall of the global economy, or bring cheap drugs into every school yard. It is a big ecosystem out there and it is rare for a single new species to alter the dynamics of the ecology. At best it will nudge it. Anonymarts will push at the edges of what is possible and might spark new versions of ebay and craigslist that trade in everyday legal stuff. That’s still big news worth paying attention to.

I am all for nudging the ecology of avarice and fraud. Perhaps those without motive to screw over their fellow human will overtake this mechanism….a girl can hope, right?

AnthonyC

I have no a priori objections to recreational drugs. I think many of them ought to be legal, and sold openly. We waste far too much effort as a society on them, instead of much more serious problems.

That said, I can’t help but oppose the use of Tor for something like this. Anything that encourages governments to set up compromised Tor nodes (set up enough and the network is no longer secure), and discourages private citizens from doing the same (because they don’t want it used for drug trafficking or because they fear being prosecuted for someone else’s misdeeds) is bad in my book. Tor is supposed to help people avoid scrutiny by oppressive governments. It depends on the goodwill of people willing to have strangers’ traffic go through their exit and intermediate nodes.

Anonymous

It’s a Tor hidden service, and as far as I understand those there is no ‘exit node’ as such and in theory nobody can locate the site-host.

AnthonyC

You are right. My mistake, I didn’t notice that.

Anonymous

“Tor is supposed to help people avoid scrutiny by oppressive governments”

That wasn’t the original intention.

This is from Michael G. Reed, one of the original creators of Tor:

“The original *QUESTION* posed that led to the invention of Onion Routing was, “Can we build a system that allows for bi-directional communications over the Internet where the source and destination cannot be determined by a mid-point?” The *PURPOSE* was for DoD / Intelligence usage (open source intelligence gathering, covering of forward deployed assets, whatever). Not helping dissidents in repressive countries. Not assisting criminals in covering their electronic tracks. Not helping bit-torrent users avoid MPAA/RIAA prosecution. Not giving a 10 year old a way to bypass an anti-porn filter. Of course, we knew those would be other unavoidable uses for the technology, but that was immaterial to the problem at hand we were trying to solve (and if those uses were going to give us more cover traffic to better hide what we wanted to use the network for, all the better…I once told a flag officer that much to his chagrin). I should know, I was the recipient of that question from David, and Paul was brought into the mix a few days later after I had sketched out a basic (flawed) design for the original Onion Routing.”

AnthonyC

It may not have been the original intention (I didn’t say it was), but it was certainly a motivation for EFF when they got involved a couple of years later, and it is still a big part of the motivation for Tor today.

Anonymous

Fair enough. I misunderstood “Tor is supposed to help people avoid scrutiny by oppressive governments” as you thinking that what was it was actually intended for.